Continuing Problem P1-55 is the first problem in a continuing problem that will

Question

Continuing Problem P1-55 is the first problem in a continuing problem that will be used throughout the chapters to reinforce the concepts learned. P1-55 Using the accounting equation for transaction analysis, preparing financial statements, and calculating return on assets (ROA) Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber Wilson graduated from college about 10 years ago. She worked for one of the "Big Four" accounting firms and became a CPA Because she loves the outdoors, she decided to begin a new business that will combine her love of outdoor activities with her business knowledge. Amber decides that she will create a new sole proprietorship, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Received $16,000 cash to begin the company and gave capital to Amber. 2 Signed a lease for a building and paid $1,200 for the first month's rent. 3 Purchased canoes for $4,800 on account. 4 Purchased office supplies on account, $750 7 Earned $1,400 cash for rental of canoes. Nov. 1 13 Paid $1,500 cash for wages Wilson withdrew $50 cash from the business. Received a bill for $150 for utilities. (Use separate payable account.) 15 16

Explanation / Answer

1.

2.

3.

4.

5.

Return on assets = Net income / Total assets = $1,375 / $22,100 = 6.22%

Assets = Liabilities + Capital + Net income Date Cash + Accounts + Office + Canoes = Accounts + Utilities + Telephone + Wilson - Wilson + Canoe rental + Rent + Utilities + Wages + Telephone receivable supplies payable payable payable Capital Witdrawals revenue expense expense expense expense Nov.1 16000 + + + = + + + 16000 - + + + + + Nov.2 -1200 + + + = + + + - + + -1200 + + + Nov.3 + + + 4800 = 4800 + + + - + + + + + Nov.4 + + 750 + = 750 + + + - + + + + + Nov.7 1400 + + + = + + + - + 1400 + + + + Nov.13 -1500 + + + = + + + - + + + + -1500 + Nov.15 -50 + + + = + + + - 50 + + + + + Nov.16 + + + = + 150 + + - + + + -150 + + Nov.20 + + + = + + 175 + - + + + + + -175 Nov.22 + 3000 + + = + + + - + 3000 + + + + Nov.26 -1000 + + + = -1000 + + + - + + + + + Nov.28 750 + -750 + + = + + + - + + + + + Nov.30 -100 + + + = + + + - 100 + + + + + Totals 14300 + 2250 + 750 + 4800 = 4550 + 150 + 175 + 16000 - 150 + 4400 + -1200 + -150 + -1500 + -175

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.